European politicians including David Cameron may have boycotted the Euro 2012 football championships, hosted by Poland and Ukraine. But Yanukovych has decided to shrug off the EU snub, instead packing the VIP terrace with his cabinet and oligarchic supporters. The only significant foreigner watching Monday's game was Uefa's president, Michel Platini, under fire for bringing the tournament to eastern Europe. (Platini looked uncomfortable; while celebrating Yanukovych inadvertently struck him over the head with the corner of his jacket.)

But with Ukrainians still celebrating their 2-1 triumph over Sweden, amid a mood of national joy, Yanukovych appears to have calculated he can ignore international opinion. On Wednesday he said Yulia Tymoshenko – the opposition leader whose imprisonment triggered the EU boycott – may be guilty of murder. Yanukovych has also indicated that he will attend next month's London Olympics, refusing to accept his role as Europe's latest pariah.

On 1 July Yanukovych will also be back in the VIP box for Kiev's Euro 2012 final. Joining him will be members of Ukraine's rada (parliament), who have each been given a free €120 ticket (£100). Not even Funtik, the nation's psychic Euro 2012 pig, can predict what will happen next. But it is possible Ukraine will meet and defeat England in Donetsk next Tuesday. If so, this would be a triumphant riposte to Yanukovych's enemies in Downing Street.

Government insiders say the decision to persecute Tymoshenko comes from Yanukovych personally. She was jailed for seven years last October in what critics, including the EU, say was a politically motivated case. Nobody, the insiders add, wants to tell the president his action has been a PR disaster, at a time when the country is hosting its biggest international event since declaring independence from the Soviet Union in 1991.

Germany's Angela Merkel has instructed her ministers to stay away, a move followed by the other countries in Ukraine's Group D, including England and France. Germany beat the Netherlands 2-1 on Thursday in Kharkiv, the city where Tymoshenko is imprisoned. According to her lawyer, she could hear the match from her hospital bed, where she is recovering from a hunger strike.

Yanukovych fails to understand how western decision-making works, the insiders add, and believes the problem can be solved by repeatedly "explaining" Tymoshenko's guilt. His advisers, moreover, are afraid that if too much pressure is applied the president will simply dump Ukraine's EU aspirations and embrace Russia. He is also genuinely terrified of Tymoshenko, they add, believing her capable of dark plots against him.

The president's Euro 2012 politics have been, by any standard, a spectacular own-goal. But in other respects the tournament has gone surprisingly well. In Kiev, Ukraine's pleasant capital, basking in 27C heat, there have been no major incidents. (The worst off-field trouble took place in EU Warsaw between fighting Russians and Poles.) Many Ukrainians feel the apocalyptic British media warnings of racism in the country were exaggerated and unfair – a "provocation" in the words of foreign ministry spokesman Oleg Voloshyn. "I think we can already say the tournament is a great success," he said. "We've had no racist incidents, no problems, no clashes between fans. Everything is quite organised. You get a visa at the airport."

The EU boycott was regrettable, but he added that ordinary fans were discovering Ukraine was a pleasant and normal European country. "We want to join the EU. The whole of society does."

Correct or otherwise, the British media warnings seem to have deterred many England fans from coming. The tournament is the team's least attended ever, with only 2,000-3,000 England fans travelling to Ukraine. There are hundreds of unwanted tickets for England's second match on Friday against Sweden, with touts selling them at face value. "They seem to think we are a wild place, with bears in the streets, and shooting," one tout, Dima, said with a smile of regret. "I met some French fans. They'd carried several cases of water with them."

On Khreshchatyk, Kiev's languid main boulevard, Swedish supporters wearing yellow and blue jerseys outnumbered their England rivals. Independence Square, the scene of Ukraine's 2004 Orange Revolution, is now a giant Uefa fanzone, with big-screens, beer tents, table football and German sausages. Most of the visitors are Ukrainians, enjoying the summer sunshine and the party mood. Festivities at the Irish pub up the road go on until after 3am.

Clutching a beer in a plastic glass, England supporter Peter Tolen, from Liverpool, said he was flying home early after a traumatic 11-hour drive to Donetsk. "We passed four road accidents and saw several dead bodies. We're happy to be alive," he said, adding reproachfully: "I don't think Platini drove on this road."

Tolen, however, said that despite his unhappy journey to watch England's opener against France he found Ukraine to be warm and friendly. "This country, from the people point of view, is one of the nicest places I've ever been to."

Certainly, Ukraine has tried. The city's Soviet-era metro has been given an anglophone makeover, with English signs and an announcement in an American accent: "The doors are now closing." Student volunteers in green T-shirts offer directions in English, in what is the world's third biggest Russian-speaking city. There are free sightseeing tours – past the wonderful baroque St Sophia's cathedral and the gold-domed St Michael's monastery, a pellucid dark blue.

"Frankly we expected worse," said Robbin Falkenstrom, 26, who had travelled to Kiev with a group of friends from Gothenburg. "People are friendlier than I thought they would be."

Falkenstrom was camping with other Swedish supporters on an island across from the shimmering Dnipro river, paying €15 a night. Nearby was a sandy municipal beach; opposite a river terminal offering pleasure cruises, with views of the city's monuments and green parks.

Despite the dearth of England supporters, many Kievans have been wearing England T-shirts. Often they don't speak English. "I admire your country. It's cultured, developed and intelligent. And I like the monarchy," Kiev resident Liliya Borisovna explained. She added: "I saw your prince on TV recently with his new wife."